Sierra Makes First Acquisition: San Fran’s Sufferfest

Dear Client:

At our Beer Industry Summit last week, two dealmakers said that there’s still room for creative craft deals in key geographies. Besides that, the topic of the day was health and wellness trends.
So it’s no surprise that those themes dovetail in this week’s huge news:

Sierra Nevada is making its first acquisition ever — of San Francisco’s Sufferfest Beer Company, founded by Caitlin Landesberg.

Sierra’s new CEO, Jeff White, said that the young company “is at the front of the ‘better for you’ wave of alcoholic Beverages.”

Sufferfest’s first brands were a pilsner and an IPA; More recently they’ve brought a couple more “functional” beers to market, which Sufferfest bills as “Beer with Benefits.” Those include FKT, a pale ale brewed with black currant (“a superfood” with “four times the vitamin C of citrus”), and Repeat, a 95-calorie/5 grams carb kolsch brewed with bee pollen, which is known for having vitamins and fatty acids.

WHO IS SUFFERFEST? BBD/CBD readers will have read our coverage of the burgeoning company last year.

Caitlin Landesberg launched this gluten-removed, beer-for-athletes brand back in 2016. All her employees are athletes; her head of ops, for instance, is a former professional NHL player. The head of sales is a former D1 lacrosse player.

“I was trying to develop a beer for my own selfish reasons… to have a guilt free, delicious, anti-inflammatory beer as a passion project,” Caitlin told BBD last fall. “Lo and behold it, was a huge audience.”

GROWING MARKETS. After having exclusively self-distributed the brand in Colorado and California, in September they signed with Reyes, Classic and Beauchamp, blanketing a “huge footprint” from Ventura to San Diego. In San Francisco/San Mateo, they’re now with Matagrano “and will be adding others in short order in NorCal.”

Caitlin had told us last fall that they were simply targeting cases sold “in the six digits for now.”

SYNERGIES? But will Sierra take the brand to all its territories? And are they distributor aligned?

“Sufferfest is still in a relatively contained geography,” Jeff told BBD and CBD. So they are indeed aligned.

Jeff confirmed the brand is sold in Colorado, parts of California, and just opened Oregon and Washington. They expect to go deeper in those places (we’d heard Texas last year, too, but not sure that’s still on the immediate plate) in short order.

Beyond that, while the TTB backlog and potential government shutdown is concerning, Jeff says they plan to brew Sufferfest out of their Chico facility.

MARKETING MOVES. We wondered what sort of marketing funds and plans were earmarked to grow the brand, and how fast.
“I think 30 years ago, when you built craft brands it was completely different,” Jeff mused.

“You have to grow organically … But differently organically. So in terms of how much marketing [monies are] allocated — while everything is all Sierra, [we’re] not going to take money from the Sierra branch and move it to Sufferfest; Sufferfest will have its own team. And we’ll figure out the best way to grow this, both geographically and volume wise — figure out how far, how fast, how big.”

CAITLIN SPEAKS. As for the tie-up, Sufferfest founder Caitlin Landesberg called Sierra Nevada “the perfect fit” for her company.
“If it were any other company, this would not be a consideration for us,” she said. “Sierra Nevada is a family-owned and operated business that isn’t driven by shareholder pressure to meet quarterly numbers,” she continued. “I’ve always been so impressed by their commitment to the communities they serve. They are really driven by their own north.” We reached out to Caitlin to gather more details, but couldn’t get in contact with her before presstime. Check back in for her comments in tomorrow’s BBD.

JEFF ON THE COURTSHIP STORY. Sierra Nevada is kinda like the George Clooney of craft beer: You didn’t expect them to settle down with another brand. But apparently, they just hadn’t found the right fit.

For those who care about the courtship story: Jeff admitted that Sierra has had “plenty of opportunities” to acquire.

“We’ve looked at a lot of things and it just never felt right,” he said.
But just last October, Jeff was at the same conference as Caitlin, where they both were speaking. They happened to be sitting at the same table, and got along well, even though they had no idea what the other one did.

“Then she went up to present … and I listened to her story, and listened to her talk about her tribe; how she approaches the market.” It resonated with him.

They stayed in touch: “We had a couple chats,” Jeff said; she wasn’t really looking for strategic partnerships, as she had investors; and more than being investors, anyway, “we’re makers and marketers,” said Jeff.

But their needs started to converge anyway, and the cultural fit was real. “It felt like I was talking to us,” says Jeff.

WHY NOT JUST INNOVATE? Sure, the two have complementary offerings, but why not just innovate internally? We asked.

“From a brand perspective and offerings perspective: yes we can make beer, we can make anything,” said Jeff. “But they are really a sort of authentic, genuine platform: They connect with more and different consumers than our normal ones,” in different occasions.

There’s “nothing wrong for companies to create their own internal company” to tackle new occasions and demographics. But that route “didn’t feel like us — not saying we wouldn’t do that in the future.”

TARGET CONSUMER? So who comprises the complementary space that Sufferfest hits?

“They connect with the highly active,” said Jeff. Their consumers literally “sweat for beer.” Sierra’s space is more “active and outdoors; there’s is active and competitive.” And of course, “Caitlin and her team communicate very successfully and effectively with women.”

“There’s this whole sorta different usage occasion.” It makes for a much wider, second sandbox for Sierra to play in, he says.
And in terms of this fast-growing, better-for-you space in beer, Jeff points out, Sufferfest was pretty much there first.

“This is Sufferfest’s third year. They were ‘country’ before ‘country’ was cool. They didn’t jump on a wave … they were already there.”

Until tomorrow,

Harry, Jenn, and Jordan

“It was such a lovely day I thought it a pity to get up.”
– W. Somerset Maugham

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